Arvind's Newsletter-Weekend edition

1.Indian companies junk private deals, take the IPO route for higher valuations

At least half a dozen startups are junking their private stake sale deals and opting for public listing, as the rising public market widens the bid-ask gap with a private fundraising market still in the grip of a funding winter, industry experts and bankers told Mint.

For instance, investors in companies such as Lighthouse Learnings and Piramal Glass have discarded their stake sale plans due to valuation mismatches in the private markets, two people with direct knowledge of the matter said.

KKR-backed Lighthouse Learnings (formerly EuroKids) earlier this year appointed investment banks JP Morgan and Avendus to look for a buyer for its 94% stake in the education company it acquired in 2019. However, the firm is now exploring either an IPO or listing the company as an REIT (real estate investment trust), one of the persons cited above said on condition of anonymity.

As for Piramal Glass, majority owner Blackstone is mulling a potential listing after calling off a stake sale process that ran for more than five months starting last November, the second person cited above said.

2.Indian tourists are conquering the world; The Economist

India’s economic rise has lifted millions out of poverty and given the country greater geopolitical heft. Less obvious is the effect of its growing consumer class on other countries. International departures from India more than doubled, to 27m, in the decade to 2019. Overseas spending by Indian travellers tripled between 2010 and 2023, to $33bn. One forecast suggests it will jump to $45bn next year. Driving this is a mix of demography and economics. People aged between 25 and 34 are the most keen on travel; a fifth the population will age into that group soon. The middle class is expected to be twice as big by 2047. The number of valid Indian passports grew from 52m a decade ago to 93m this year.

By 2040 the number of international departures could hit 80m or even 90m, reckons McKinsey, a consultancy. That is not far off the 104m Chinese who went abroad in 2019. But Chinese consumers are increasingly staying at home; their foreign travel is not growing as fast as it used to. Indians are thirsty to see the world. Unlike the Chinese at a similar stage, however, they are not rushing to Europe. It is countries closer to home that are reaping the rewards.

In recent decades, as China became the world’s biggest source of tourists, Western countries adjusted. Governments simplified visa processes, airports installed signage in Mandarin, and shops started accepting Chinese payment platforms. But they have been slower to court Indian tourists. Meanwhile, Middle Eastern and South-East Asian countries are racing ahead. Thailand and Malaysia have suspended visa requirements for Indians. Other countries are recruiting Bollywood stars as brand ambassadors: Abu Dhabi tourism has landed Ranveer Singh, who used to promote Switzerland; Dubai has roped in Saif Ali Khan and Sara Ali Khan, a father-and-daughter duo. The countries that welcome Indians will enjoy both the economic benefits and the cultural soft power that tourism affords.

Read on

3.Maruti to start new showroom line 'Nexa Studio' in Tier-2, -3 cities

Maruti Suzuki India Limited (MSIL) is planning to launch a new showroom line called “Nexa Studio” that will cater for Tier-2 and Tier-3 cities of the country, company's senior executive officer for marketing and sales Partho Banerjee told Business Standard on Friday.

Nexa Studio would be smaller in size than usual Nexa showrooms and have service workshops and spare parts areas in them, he said, adding that 100 Nexa Studio dealerships will be opened by March 31 next year.

"Generally, Nexa showrooms are much bigger in size, are present in big cities, and do not have service workshops in them. Nexa Studio showrooms would have a space to display just two cars, one delivery area, one workshop bay, and one customer lounge," Banerjee explained.

"This endeavour is to extend the same Nexa experience to customers in Tier-2 and -3 cities, only optimizing the size of the Nexa showroom," he added.

4.Jay Powell says ‘time has come’ for US interest rate cuts

Jay Powell has signalled he is ready to cut US interest rates in September, as he warned that “downside risks” to the labour market had increased. “The time has come for policy to adjust,” the Federal Reserve chair said in a hotly anticipated speech in Jackson Hole, Wyoming, on Friday. “The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks.”

Powell said the Fed would do “everything we can to support a strong labour market as we make further progress towards price stability”. In comments that buoyed stock markets, he warned that “the upside risks to inflation have diminished, and the downside risks to employment have increased”.

5.US Vice President Kamala Harris accepted the Democratic presidential nomination 

Harris acknowledged her “unlikely” journey and framed November’s election between her and Donald Trump not as a choice between left and right but between freedom and autocracy, vowing to “strengthen, not abdicate” the US’ global leadership.

Harris spoke about growing up in a working-class neighbourhood with an immigrant single mother. “She taught us to never complain about injustice, but do something about it,” Harris said. “She also taught us, ‘And never do anything half-assed.’”

Harris accused Trump and the Republicans of planning to jail opponents, cut taxes for the rich and ban abortion nationwide. “Simply put, they are out of their minds,” she said.

Harris’s speech included a statement of support for Israel, a denunciation of Hamas and a demand for security and dignity for the people of Gaza. It was effort to bridge the Democratic Party’s divides on the war.

6.Second-Largest Diamond Ever Found Is Discovered in Botswana

The rough diamond is large enough to fill an adult holder’s palm, and weighs more than a pound and a half, but its value is still unclear. The valuation process could take months.

The diamond, a 2,492-carat stone that is the biggest diamond unearthed in more than a century and the second-largest ever found, according to the Vancouver-based mining operator Lucara, which owns the mine where it was found.

7.Lufthansa is using artificial sharkskin to streamline airplanes

Companies are often caught between wanting to cut emissions but also grow profits. But for airlines, these two different imperatives actually align. Cutting carbon emissions means burning less fuel and spending less money buying fuel. 

This is why Lufthansa has been copying a trick from the animal kingdom: applying a special film that mimics sharkskin to parts of its aircraft.

Lufthansa will fit four Boeing 777-200ER aircraft (operated by Austrian Airlines) with the shark skin technology, joining 17 other airframes (a Lufthansa Boeing 747-400, 12 Swiss Boeing 777-200ERs, and four Lufthansa Cargo Boeing 777Fs), which already feature the film.

Nearly 9,000 square feet (830 m2) of the planes' surface—along the fuselage and also the engine nacelles—will be covered with sheets of AeroSHARK film, which mimics the scales on actual sharkskin with 50-micron-thick riblets that reduce friction by minimizing the turbulent boundary layer.

In sharks, it's calculated this equates to about a 10 percent reduction in drag versus smooth skin, and using this approach has helped Olympic swimmers cut through the water more easily. But that's for swimming through water; the effect on a plane traveling through the air is more modest, but it should still cut fuel by around 1 percent per flight.